MasterCard Reports a Loss for Q2 on Charitable Donation

by Patrick Lunsford CollectionIndustry.com

Recently public credit card company MasterCard Incorporated (NYSE: MA) announced earnings for the second quarter Wednesday. The company reported a loss for the second quarter on a one-time charitable donation it made in conjunction with its May 2006 IPO.

MasterCard reported a net loss for the second quarter of $310 million, or $2.30 per share, on net revenue of $846 million. The revenue figure represents a 9.7% increase versus the same period in 2005.

MasterCard said that its earnings were dented by a donation of approximately 13.5 million shares of Class A common stock to the MasterCard Foundation that occurred simultaneously with the company’s initial public offering in May 2006. The impact of this non-cash, non-recurring donation resulted in a $395 million expense that is not deductible for tax purposes.

When the donation and other special items relating to the IPO were excluded, MasterCard posted net earnings of $101 million, or $0.74 per share, in the second quarter.

The company also said that gross dollar volume was up 16.4% in the quarter and that purchase volume was up 17.5%.